Charging for online content may be a lifeline for publishers

Written on the 8 May 2009 by Miriam Steffens

IT IS GOING to be like stuffing toothpaste back in the tube, says Jack Matthews, the head of Fairfax Media's digital business unit.

But as media watchers and analysts digest Rupert Murdoch's latest push to start charging readers for access to newspapers online, some say making it work may be a matter of survival for publishers challenged by an advertising recession and the shift of eyeballs and dollars to the internet.

The problem is that after a decade of giving away content how willing will readers be to pay for something they are used to getting for nothing?

Mr Murdoch, who just two years ago argued advertising would fund free news sites, now seems convinced the pay-for-read model makes business sense, announcing that News Corp would introduce fees on news sites over the next year.

"That it is possible to charge for content on the web is obvious from the [Wall Street] Journal's experience," he said this week, pointing to the rising online readership of News Corp's fee-based flagship finance paper.

News Corp is now looking at which of its titles around the world should charge, with The Australian flagging that it could within 18 months. Industry rivals are watching with interest.

"Clearly all of us in the online news business would like to see a way to charge for content," said Mr Matthews, but it was unclear if readers would pay for general news.
Fairfax, which charges for The Australian Financial Review online, had no plans to introduce fees for the Herald and The Age sites, he said. But it was looking closely at revenue models for news on mobile devices.

"I think most people would agree with me that the opportunities to charge for mobile would probably be easier to get our head around than the ability to charge for something that has been free for a long time," he said.

"The problem really is how do you get the toothpaste back into the tube?"

For newspapers it was becoming a question of survival, said Steve Allen of Fusion Strategy.

"I don't think they have a choice. They know they're looking at a black hole if they don't."

Peter Cox, a media analyst, agreed publishers must move to a paid-for model to remain viable. "You can't expect that advertising is going to support all the traditional and new media," he said.

According to Mr Allen, a $200 per year online subscription would be a workable model for general-interest papers.

Mr Murdoch's comments marked a seminal moment for the industry, he said.

" I think we will see a subscription model for content within a year," he said, spearheaded by News and followed by others.